Jim Lloyd, JD, MPP and Maia Crawford, MS

May 7, 2015

On April 22 and 23, 2015, State Innovation Model (SIM) award recipients convened in Baltimore, Maryland to discuss “the next wave of innovation” in health care payment, delivery system reform, and population health improvement. Meeting attendees included representatives from the six Round 1 SIM Model Test States and the 32 Round 2 awardees, announced by the Center for Medicare & Medicaid Services’ Innovation Center in December 2014. Under SIM Round 2, 11 Model Test States were awarded between $20 and $100 million to test new health transformation approaches over a four-year period, and 21 Model Design States and Territories received up to $3 million to design innovation plans to pursue comprehensive health system reform.

While SIM awardees’ reform models vary significantly, the federally sponsored initiative is focused on the following priorities: (1) fostering multi-payer and provider commitment to value-based payment; (2) achieving provider-led practice transformation; (3) improving population health outcomes; and (4) promoting information exchange across purchasers, payers and providers to improve cost and quality outcomes.

Five themes from SIM Round 2 awardees’ proposals were common discussion points at the in-person meeting (Round 1 Model Test States also continue to implement their health transformation plans, but the examples below only reflect SIM Round 2 efforts):

1. Phasing in risk and complexity into new payment models

SIM Round 2 awardees proposed a variety of delivery system reforms, including patient-centered medical homes, behavioral health integration programs, and accountable care organizations. Tasked with simultaneously transforming how health care is delivered and paid for, the majority of SIM Model Test awardees propose phasing risk into value-based payment strategies over time and creating a “glide path” for providers to gradually transform to more sophisticated, risk-based models. For example, Colorado is pursuing a care delivery model that integrates behavioral health and primary care and proposes a tiered payment system that moves from shared savings to shared risk to global budgets. Delaware plans to incrementally introduce pay-for-value and total cost of care payment models over the five-year test period.

2. Supporting providers as they transform how care is delivered

SIM awardees are investing in on-the-ground support for practice transformation activities to ensure that providers have the knowledge and resources necessary to successfully adopt new delivery system reforms. Tennessee, for example, is investing more than $20 million between 2015 and 2018 to support practice transformation—in the form of provider trainings and quality improvement programs—for its adult and pediatric patient centered medical homes (PCMHs) and health homes program. Idaho is funding seven public health districts to serve as regional collaboratives that will support practices as they transform to PCMHs, expand their capacity, and link to the broader medical neighborhood.

3. Tackling population health at the local level

SIM Round 2 places a greater emphasis on population health improvement than Round 1; awardees are encouraged to integrate population health improvement strategies into their delivery system reform initiatives. Many states and territories are tailoring population health programs to address local health needs and disparities, and are engaging with officials from the Centers for Disease Control and Prevention to align federal, state, and local population health efforts. Washington, for example, is establishing 10 regional Accountable Communities of Health to implement evidence-based population health strategies, and plans to scale and spread effective local models. Michigan’s Community Health Innovation Regions will facilitate cross-sector partnerships and help connect patients with local community services, while New Jersey’s SIM office announced competitive funding opportunities for local non-profits to run population health interventions.

4. Prioritizing broad stakeholder engagement

Regardless of the size or scope of the SIM initiative, awardees recognize the importance of involving a variety of health care stakeholders in the planning process—such as providers, payers, consumers, and state agencies. Nevada is focused on engaging rural stakeholders in its model design process, hosting a series of public meetings in rural communities and creating an online survey to gather additional input. Connecticut is implementing an Equity and Access Council, comprised of payers, providers, researchers, and consumer groups, with a particular emphasis on directly engaging health care consumers. Kentucky is taking an “all comers” approach to its SIM work groups, seeking broad participation in SIM planning. Awardees are also engaging stakeholders via public presentations and webinars, targeted stakeholder groups, and one-on-one meetings in order to relay information about SIM, build buy-in and support, and collect feedback about proposed interventions.

5. Investing in health information technology

Given the importance of data in ensuring models’ success, SIM awardees are planning to invest significant SIM resources in enhancing health information infrastructure to support system reforms. Oklahoma hopes to establish a value-based analytics tool to integrate health data from multiple sources and develop statewide population health metrics. Iowa is developing a statewide alert system that will provide near real-time information about patients and their health care utilization to providers, including data on admissions, discharges, transfers, and lab results. The District of Columbia is developing a data system that identifies racial disparities in access to health care to help target and direct limited resources. Other SIM participants, including New York, plan to implement patient-facing health information portals to enhance patient involvement in health care decision-making.

SIM, a first-of-its-kind federal initiative, is providing valuable resources for states and territories to develop and implement strategies focused on fundamentally changing how health care is delivered and financed. Since SIM funding is time limited (four years for Test Awardees and one year for Design Awardees), recipients must ensure that initial investments are leveraged to produce meaningful and long-lasting changes. They are therefore establishing sustainability plans that create a clear pathway to continue SIM-initiated transformations even after the award period ends. As SIM Round 2 continues and awardees further refine their transformation plans, the full impact of this truly ambitious initiative will become even more apparent.

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